Finance Keywords
- Created by: Kathryn
- Created on: 15-03-14 16:00
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- Finance Keywords
- Start-up Capital
- the finance needed by a new business to pay for essential fixed and current assets before it can begin trading.
- Working Capital
- the finance needed by a business to pay its day-to-day costs
- Capital Expenditure
- is money spent on fixed assets which will last for more than one year.
- Revenue Expenditure
- money spent on day-to-day expenses which do not involve the purchase of a long-term asset
- for example wages or rent
- money spent on day-to-day expenses which do not involve the purchase of a long-term asset
- Internal Finance
- is obtained from within the business itself
- Micro-Finance
- is providing financial services - including small loans - to poor people not served by traditional banks.
- Cash Inflow
- are the sums of money received by a business during a period of time
- External Finance
- is obtained from sources outside of and separate from the business
- Cash Outflow
- the sums of money paid out by a business during a period of time
- Cash Flow
- the cash inflows and outflows over a long period of time
- Cash Flow Cycle
- shows the stages between paying out cash for labour, materials etc. and receiving cash from the sale of goods
- Cash Flow Forecast
- an estimate of future cash inflows and outflows of a business, usually on a month-by-month basis.
- This then shows the expected cash balance at the end of each month.
- an estimate of future cash inflows and outflows of a business, usually on a month-by-month basis.
- Profit
- is the surplus after total costs have been subtracted from sales revenue
- Opening cash balance
- is the amount of cash held by the business at the start of the month
- Accounts
- the financial records of a firm's transactions
- Closing balance
- the amount of cash held by the business at the end of each month. This becomes next month's opening balance
- Net cash flow
- the difference, each month, between inflows and outflows
- Accountants
- the professionally qualified people who have responsibility for keeping accurate accounts and for producing the final accounts
- Final accounts
- produced at the end of the financial year and give details of the profit or loss made over the year and the worth of the business
- Income Statement
- document that records the income of a business and all costs incurred to earn that income over a period of time.
- It is also known as a profit and loss account
- document that records the income of a business and all costs incurred to earn that income over a period of time.
- Cost of goods sold
- the cost of producing or buying in the goods actually sold during a time period
- Trading account
- shows how the gross profit of a business is calculated
- Sales revenue
- the income to a business during a period of time from the gsale of oods or services
- Net Profit
- the profit made by a business after all costs have been deducted from sales revenue.
- It is calculated by subtracting overhead costs from gross profits.
- the profit made by a business after all costs have been deducted from sales revenue.
- Deciprication
- is the fall in the value of a fixed asset over time
- Retained profit
- the net profit reinvested back into a company, after deducting tax and payments to owners, such as dividends
- Balance sheet
- shows the value of a business's assets and liabilities at a particular time. Sometimes referred to as "statement of financial position"
- Assets
- those items of value which are owned by the business. They may be fixed or short term.
- Liabilities
- debts owned by the business
- Non current assets
- are items owned by the business for more than one year.
- Current assets
- owned by a business and used within one year
- Non-current liabilities
- are long term debts owed by the business
- Current liabilities
- are short-term debts owed by the business
- Liquidity
- the ability of a business to pay back its short-term debts
- Capital employed
- shareholders' equity plus non-current liabilities and is the total long-term and permanent capital invested in a business
- Illiquid
- that assets are not easily convertible into cash
- Gross Profit
- when sales revenue is greater than the cost of goods sold
- Start-up Capital
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